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Lionsgate vice chairman Michael Burns sees the Hollywood studio as a potentially attractive takeover target amid continuing industry-wide mergers and acquisitions in the streaming era.
“We do expect to see more consolidation in the media space — that’s a given. And we’re obviously one of the last remaining, very large, independent companies, and there’s great scarcity value out there,” Burns told the Goldman Sachs Communacopia Conference during a session that was webcast on Tuesday.
The entertainment industry has seen a recent spate of mergers and acquisitions as major players dive into the streaming space and indie studios get bought up for scale and content. “We’re going to continue to identify ways for us to increase the value of our stock price,” Burns added after recent deals like the spinoff-merger of AT&T’s WarnerMedia division with Discovery and Amazon’s planned acquisition of MGM Studios put a takeover target on the back of Lionsgate and its Starz streaming platform.
The Hollywood studio has long been the subject of M&A chatter as digital titans like Facebook, Apple and Amazon muscle into Hollywood. Burns argued that, while bigger conglomerates buy up rival studios, Lionsgate has been busy acquiring content libraries, which includes purchasing a 20 percent stake in the Spyglass Media Group and around 200 film titles.
“The ability to buy these libraries while everybody else is standing still, that’s a strategic advantage for us,” he added. The 200-title Spyglass library has been added to Lionsgate’s existing 17,000 film and TV titles, a collection that also includes libraries from earlier acquisition deals with Artisan, Trimark and Summit Entertainment.
Burns also discussed rising talent costs in Hollywood as traditional box office-based feature deals with stars are complicated by pandemic-era moves to divert film titles to the streaming space to attract SVOD subscribers. “The way people get paid, the giant $20 million to $25 million actors will have different compensation criteria if something goes directly to streaming. But I do believe that we’re in the Wild West right now. A lot of those deals will be a little different than they used to be,” he argued.
But even as theatrical windowing evolves, Burns added, big-name actors will always want to work with Lionsgate. “I do believe that actors, directors, below-the-line talent, they all want to work. And if you have the right script, the right source material, you will get that A-talent, because they want to participate in that,” Burns said.
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